Understanding the Repercussions of AI Scams

Article written by: Lakkshanasre Viyasarramanujam

Article designed by: Lakkshanasre Viyasarramanujam & Palak Tiwari

We live in a world of AI that’s constantly changing the socio-tech landscape, but the real question is: how much good has it done to our world? While it brings innovation and a method for accomplishing tasks more proficiently, it also brings an emerging dark side as well: a rise in online and AI-driven scams. As our dependence on AI deepens, it’s clear that this technology is here to stay. But this shows that we just need to be able to adapt to its challenges and protect ourselves in the future. In this blog, we’ll break down what these scams look like, what damage they can cause, and how we can also combat these challenges to protect our online identity.

What are AI Scams?

AI scams use artificial intelligence to operate as the main facilitator for scam operations like manipulating individuals to steal information or gain access to their personal information — both of which are very dangerous in our world today. One common misconception that people are often mistaken for is that they believe that they are similar to any other online scam. However, AI scams hold much more impactful consequences as the utilization of AI can appeal more realistic or even personalized. This can be recognized by scammers who often act to impersonate friends and family that are close to the victim.

According to NYC’s department focused on Consumer and Worker Protection, they do this by “manipulating videos and recordings found on social media to produce realistic sounding voice recordings or even videos” (NYC 1). This is what scammers often use AI for their incentives; this is known as deep fakes. In addition to cloning voices or using deep fake videos, there can also be ransomware attacks, which encrypts the victim's personal data until a ransom is paid, or phishing attacks, which use AI to replicate convincing and personalized phishing attacks, usually seen in email or messaging platforms. These attacks have created detrimental impacts on individuals, victims or businesses that led to the loss of millions.

Financial Damage

Deep fake impersonations are on the rise and they are a huge cause to overall financial damage. To be precise:

61% rise in these scams present a significant cause for financial damages overall. It is making it increasingly difficult for individuals to distinguish between authentic and fake communication. In fact in 2023, “funds transfer fraud (FTF) and business email compromise (BEC) accounted for 56% of all cyber claims, with total reported losses reaching $2.9 billion.”

Now, that’s a lot of money lost! Scammers are clever about how they attack the particular business and often utilize ransomware and phishing attacks, which many companies and businesses are susceptible to. It not only affects businesses, but individuals as well. Targeted calls that ask for bank details or any other personal identifiers can result in giving information without disclosure. As a result of exposing confidential information, these scammers are now able to access bank accounts and high level details that will easily lead to huge losses of money.

(Image from Abnormal Security)

Psychological Effects

AI scams have deliberately proven themselves in causing great psychological impact, which is why we need to consider the impact of individuals that have been affected by this. In addition to losing lots of money, many individuals reflect a range of responses – from emotions like anxiety, embarrassment, or helplessness — as explained by Seegert and Blum in the Association of HealthCare Journalists.

“Some older adults can just shrug it off, while others take it hard, and it has a profound impact. We see impacts on sleep, and some depressive and anxious symptoms, there’s often a lack of trust or distrust that occurs, and if it happens within a marriage, it might even end in divorce.”

(Liz Seegert and Karen Blum from Association of HealthCare Journalists)

Scary, right? Consequences like these are real. They have happened to real victims. Beyond just the stress and anxiety we feel when we start panicking about our accounts getting hacked, the rise of deepfakes and cloning has made it harder to know what’s real and what’s not. It often creates a growing sense of distrust, blurring the line between real and fake realities. This can lead to a creation of false memories or maybe questioning ourselves a lot more often. Thus, it is really important to take care of ourselves, assess the surroundings, and make a logical decision.

How Can We Deal with This Issue?

After learning about the consequences it has on us, financially and emotionally, we should be aware of the signs that can pinpoint AI scams. If the AI scam seems to appear out of the blue, ignore it. Look out for more red flags that are apparent in AI scam. For example:

• You are contacted out of the blue.

• You are pressured to act immediately, with no time to think.

• The caller is urgently requesting money, usually through a wire transfer, gift card, payment app, or cryptocurrency. These methods of payment make it nearly impossible to get a refund once you’ve been scammed.

• The caller is requesting personal or private information from you.

• You are told to keep the caller’s request a secret.

  
  

According to the New York Government of Consumer and Worker Protection, they recommend that an individual should always take these steps:

1. Be Skeptical of Unexpected Contact

2. Always Verify

3. Limit What You Share Online

4. Think Before You Act

5. Report and Stay Educated on Emerging Threats/AI Tech

It all starts with the type of security system we build and maintain; as a result, it is important to have a strong password and authentication system wherever personal information is disclosed. Users should not expose their personal information in AI generated or manipulated data systems as personal information can be tracked. And most importantly, if you receive something out of the blue — a message, email, or a phone call — make sure to assess it. Is it something you expected? Remember to always stop, listen, think, and act.

“Urgency is one of a scammer’s most powerful tools in getting you to do what they want. You can take control of the situation by pausing for a moment to consider the situation rationally.”

— NYC Consumer and Worker Protection

Works Cited

Blum, Liz Seegert and Karen. “Elder Scams Can Have Real-World Health Effects. Will AI Make It Worse?” Association of Health Care Journalists, 26 Feb. 2024, healthjournalism.org/blog/2024/02/elder-scams-can-have-real-world-health-effects-will-ai-make-it-worse/.

“Elder Scams Can Have Real-World Health Effects. Will AI Make It Worse?” Association of Health Care Journalists, 26 Feb. 2024, healthjournalism.org/blog/2024/02/elder-scams-can-have-real-world-health-effects-will-ai-make-it-worse/.

“DCWP - Artificial Intelligence Scam Tips.” Www.nyc.gov, www.nyc.gov/site/dca/consumers/artificial-intelligence-scam-tips.page.

Fox, Jacob. “Top 40 AI Cybersecurity Statistics | Cobalt.” Cobalt.io, Cobalt, 10 Oct. 2024, www.cobalt.io/blog/top-40-ai-cybersecurity-statistics.

Gorman, Benjamin. “5 AI Scams to Watch out for in 2025.” @LifeLock, LifeLock, 18 Nov. 2024, lifelock.norton.com/learn/internet-security/ai-scams.

“Key Takeaways from the 2023 FBI IC3 Report: Business Email Compromise Losses Jump to Nearly $3 Billion.” Abnormal AI, 7 Mar. 2024, abnormal.ai/blog/2023-fbi-ic3-report-takeaways. Accessed 25 Apr. 2025.

Team, R&I Editorial. “AI-Powered Deepfake Scams Can Cause Significant Financial Losses - Risk & Insurance.” Risk & Insurance, 23 July 2024, riskandinsurance.com/ai-powered-deepfake-scams-cause-significant-financial-losses/.

Wei, Marlynn. “The Psychological Effects of AI Clones and Deepfakes | Psychology Today.” Www.psychologytoday.com, 13 Feb. 2024, www.psychologytoday.com/us/blog/urban-survival/202401/the-psychological-effects-of-ai-clones-and-deepfakes.